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Teaching children and teens how to manage their money

Teaching children and teens how to manage their money

Published: Tuesday, Dec. 18 2012 6:30 a.m. MST

Among the tips he gives students is to have your accounts set up so that you receive a text message anytime there is deposit or withdrawal activity.

"It helps to prevent fraud … and makes individuals more aware of their account balances," he said. "You know in real time where (your) balances are."

In speaking of the ever-increasing use of credit by consumers, Christensen said credit used properly can be a useful tool, but used incorrectly can be very dangerous.

"It's like a chain saw," he said. "If you can't handle a chain saw, you better not be messing with one because it's going to be ugly. … Similarly with credit."

Getting financial advice

Ann House, coordinator of the personal money management center at the University of Utah, said young adult students come to her office regularly with financial issues.

The center, which opened in 2011, provides education, guidance and counseling in matters of personal finance primarily for students. However, workshops on various topics are also offered for students and the community at large.

In addition to leading the center, House is also a financial counselor and instructor in the university's department of family and consumer studies, which offers an emphasis in financial planning.

"We've seen a lot of traffic come through here in the last year," she said. "Students are not getting enough good information (about personal finance)."

She said her office is working to help young adults understand the best way to manage money and credit, as well as expose them to all the options available to them for better money management.

While there are numerous resources available to teenagers and young adults, few exist for younger children. That leaves education of young kids to parents who are willing and knowledgeable enough to teach kids the value of money and the best way to manage finances.

Teaching young children

Melissa Cundiff, a Sandy mother of three, said she and her husband have developed a plan to teach their kids the value of earning money and how to manage it. They modified a plan they read in a book about teaching children personal finance.

Rather than giving her kids an allowance, they earn money by doing household chores. With that money, they are responsible for buying all of their own clothes, school supplies, gifts for birthdays or anything else, she said.

"The way we budgeted their ('wages') was based on how much we would be paying for all of those things," she said. "So instead, we make them responsible for it. If they don't meet their responsibility, then they don't get the money.

"So they are motivated," she said with a laugh.

Her kids are 6, 10 and 13 years old. She said the "work for pay" plan has been mostly successful in the year-and-a-half since it was implemented.

She said there are times when the kids earn very little money and have to adjust their spending habits accordingly.

"There are 'pouty' times when they want $100 pair of shoes," she said. "They are upset they don't have the money for them."

But she said they now have begun asking for coupons to help save money and increase their purchasing power, a sure sign that they are learning the lessons they are trying to instill.

"It definitely involves work and discipline on our part as parents because it's a lot easier for me to just go out and buy them clothes rather than having to take them and their money and have them figure it out," she said. "But we feel like it is time well spent to teach them how to do it."

Email: jlee@desnews.com

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